Thirteen years back, Nigeria offered its power sector to repair the lights. Who is still awaiting them to come on? On 1 November 2013, the Federal Government handed the generation and circulation business to personal owners amidst guarantees of steady supply, personal financial investment and an end to the generator economy. Thirteen years later on, the decision appears: the reform has actually stopped working Nigerians. Set up capability goes beyond 13,000 megawatts, yet offered generation still hovers in between 4,000 and 5,000 megawatts, approximately where it stood before privatisation. The nationwide grid collapsed two times in 5 days in January 2026 alone and suffered more disturbances in the months that followed. Houses and services still operate on fuel and diesel. No major financial healing can be constructed on this structure, and it is time to state so without euphemism.
The expenses of undependable electrical energy supply fall most greatly on manufacturers and companies. The Manufacturers Association of Nigeria approximated that its members invested more than 1.5 trillion on alternative energy in 2025. BusinessDay reports that increasing energy expenses have actually enforced a fourfold expense shock on the nation’s biggest companies. Small companies deal with even higher difficulties, as they do not have the bargaining power to work out bulk diesel materials and the resources to install their own solar plants.
The Minister of Power has actually acknowledged that electrical energy created utilizing diesel expenses roughly 950 per kilowatt-hour, while petrol-generated electrical energy expenses around 750, compared to approximately 209 for Band A grid consumers. When the grid stops working, Nigerians pay 3 to 4 times more for energy, and these extra expenses are shown in the rates of bread, cement, and transportation. Private-sector activity continues to broaden; nevertheless, the October downturn in the Stanbic IBTC PMI was credited to increasing fuel expenses. Energy now represents a direct restraint on development.
Privatisation, as a principle, did not stop working; Nigeria’s application and oversight did. 4 failures stick out, none of which can be credited to a single administration. The very first was the sale itself. Financiers got possessions that were, oftentimes, undercapitalised and greatly leveraged, while having actually restricted experience running electrical energy energies. Numerous circulation business have actually given that come under the control of AMCON or their lending institutions due to the fact that of debt-related insolvency. Privatisation that leaves important facilities in receivership does not move danger to personal owners; it simply alters who bears the repercussions of failure.
The 2nd failure is a market where expenses go overdue. In January 2026, circulation business got roughly 336 billion worth of electrical energy, billed consumers 268 billion, and gathered just 205 billion. The deficiency waterfalls upstream. Generation business state they now get well under half of the quantities they invoice and approximate that the financial obligation owed to them had actually reached roughly 7.66 trillion by June 2026, cautioning that it might surpass 17 trillion by 2033. Of the 1.92 trillion owed to them for electrical energy provided in 2025, the federal government paid around 3.7 percent. A 501 billion bond provided under the governmental financial obligation decrease program covers just a little portion of the tradition financial obligation. Generators that are not paid can not pay gas providers, while gas lacks– reported at around 937 million basic cubic feet each day previously this year– keep power plants idle. The sector is caught in a financial obligation cycle that perpetuates insufficient electrical power supply.
The 3rd failure is pricing by politics instead of by concept. Tariffs listed below expense are an aid by another name, and an unfunded one. The federal government has, in impact, guaranteed customers inexpensive electrical energy and guaranteed generators complete payment, then stopped working to money the distinction. Election seasons make this even worse, due to the fact that no federal government wishes to raise tariffs before citizens go to the surveys. The outcome is the worst of both worlds: Nigerians pay insufficient to fund a working system, and after that pay even more for the diesel that changes it.
The 4th failure is weak enforcement. Regulators were implied to evaluate efficiency and act versus operators that stopped working to invest, meter clients or minimize losses. Frequently, enforcement has actually been delayed, worked out or overlooked. Countless consumers stay unmetered and are billed by quote, which types mistrust, motivates bypassing, and results in non-payment. Band A clients, who pay premium tariffs for a minimum of 20 hours of supply, have actually needed to depend on regulative orders for settlement when that supply stopped working to materialise. A regulator that can not make its own guidelines stick welcomes the marketplace to neglect them.
What must now be done? The federal government ought to carry out a truthful, released audit of every circulation and generation business versus its privatisation dedications. Operators that can not recapitalise or provide must be needed to offer to financiers who can. Thirteen years is long enough to examine this policy’s efficiency. Second, the sector’s financial obligation should be solved through a reputable, financed strategy, not a series of statements. If federal government wants to keep tariffs listed below expense for susceptible families, it needs to budget plan for the aid honestly and pay it on time. An unfunded aid is not empathy; it is a guarantee that ensures blackouts.
Third, metering needs to be finished. Every client needs to be metered, and approximated billing must end. Precise metering would raise collections, minimize conflicts and enhance the case for reasonable tariffs. 4th, the chance produced by the Electricity Act 2023 ought to be utilized decisively. States can now manage their own electrical power markets. Those that develop reliable structures for ingrained generation, mini-grids and solar can draw in financial investment far quicker than the nationwide grid can be fixed. The Vice President’s current require states to establish their electrical power markets must be followed by concrete action.
Fifth, the transmission network requires continual financial investment and independent management. Repetitive grid collapses show a network that has actually not equaled need. Without a steady grid, brand-new generation capability just has no place to go.
Eventually, from the viewpoint of a well balanced scorecard (an efficiency measurement design), history will examine this reform by a single result: whether a generation of Nigerians matured with dependable electrical power. By that step, thirteen years of privatisation have actually stopped working, and succeeding federal governments, regulators, and operators share obligation. The scorecard is unforgiving throughout every measurement. Economically, financial obligations owed to electrical energy generation business (GENCOs) have actually reached around 7.66 trillion, while price quotes of public funds invested in the sector considering that privatisation variety from 7 trillion to 10 trillion.
From the consumer point of view, producers invested more than 1.5 trillion on alternative energy in 2025, and countless families are still billed based upon price quotes instead of meter readings. In regards to internal procedures, the nationwide grid has actually collapsed more than 120 times in eleven years, and circulation business gather just about three-fifths of the worth of the electrical power they get. In regards to knowing and development, readily available generation stays in between 4,000 and 5,000 megawatts, compared to more than 13,000 megawatts of set up capability, while generation capability has actually decreased by roughly 15 percent in 5 years. No reform program, development target, or aspiration to construct a $1 trillion economy is reputable while the nation stays based on generators. Repairing the electrical energy sector is not simply one top priority amongst lots of; it is a prerequisite for all others, and management ought to treat it.
Posi Olatubosun is a UK-based scholastic professor in accounting and financing.
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